3 Things to get to ROI on new salespeople faster

The formula for salesperson success at many companies is nothing more than activity goals, hard work, and self-discipline. It is a “sink or swim” mindset founded on the belief that sales is an individual discipline performed by aggressive “go-getters”.

This formula’s premise is “experience is the best teacher”, and that successful salespeople are quick studies who “figure it out fast” and win. It is not that this old way never works; it simply does not work often enough. Experience is a great teacher; it is just slow and inefficient. This “sink or swim” formula is the cause of long lead times, high turnover, and poor sales team ROI.

Here are 3 things to do that will get to ROI faster.

1. Have a success formula

Companies with a success formula that they know works, and why it works, have the shortest salesperson ramp up period.

These companies have collected the skills, knowledge, habits and behaviors of their best salespeople into a playbook that is teachable to the team.

Here is what those Playbooks include:

Where we win as a sales team and how to find those prospects

Why we win, and how to help the customer understand why

What to do in our plans and activities that will lead to wins

How our sales systems work inside the team and with the rest of the organization

How we will be measured

What we are expected to know

When we are expected to know it

2. Validate your hires: Test, test, test

Delaying the confirmation of your sales hire until after they are ramped up is a major contributor to the short 2 1/2 year average salesperson tenure. Companies end up waiting until the ramp up period is over to see if the salesperson can get to quota. This is because they use sales results as the primary measure of sales performance, and this is a big mistake. Sales results are a trailing indicator, and with sales cycles of 3, 6, or even 12 months, they take too long to prove the fit of the salesperson. It is like trying to drive a car staring at the odometer when what is needed is a speedometer.

We need leading indicators to tell us how fast we are going

Leading indicators are efficiency marks that can be compared against team and industry benchmarks from the very beginning. They should include:

Testing sales skills to confirm the foundation is there or is being learned

Low contribution margin during ramp up time to productivity (See last month’s blog)

Customer loss/loyalty issues

Indirect costs

Management distraction – constantly working with new hires, and underperforming salespeople trying to get them to productivity (See “First Break All The Rules”)

Low morale in a team that has high turnover, unproductive and unhappy salespeople

Brand reputation harm, both internally and externally, that comes with high salesperson turnover

Limited team support for learning and deal tactic innovation

In businesses with smaller sales teams the turnover has a huge impact on company growth rates

High turnover in your sales team seeps into the morale, performance and results of the entire organization. It creates a negative culture that weakens the business. Despite all of this, many sales leaders and business owners take the approach that says, “Until they (new salespeople) prove they are worth it, I am not going to invest in them.”

Start the Development Track on Day One

The better way is to invest in a concentrated development model. Use the testing in the ramp up phase to filter out the bad fits early on, and then dedicate the investment, time, and resources into an optimal environment (our next blog will describe what this environment should look like) that gets the good fits to success fast and keeps them there longer.

Consider this: Salespeople seldom leave jobs where they are making money!